New Delhi, Jan. 14: The war clouds looming over Iraq and the oil strike in Venezuela have come as a boon for the beleaguered shipping companies, as freight rates have nearly doubled.

Demand for tankers has surged with several countries stockpiling oil to hedge against a sudden shortage in the event of another Gulf war and to deal with a severe winter in Europe.

Consequently, the time hire charter rates which began moving upwards since November last year have now gone up by 100 per cent. This has reversed the gloomy forecast for the shipping industry at least in the short-term.

Leading Indian shipping companies—Shipping Corporation of India, Great Eastern and Essar—which have a large proportion of their revenues coming from tanker fleets are, therefore, poised to rake in higher profits during the current quarter.

Sources say the rates for very large crude carriers (VLCCs) have gone up from $ 55,000-60,000 per day to about $ 10,000-12,000. Suezmax tankers, which are about half the size of VLCCs, are getting $ 25, 000-60,000 per day.

The next smaller category of Aframax tankers are charging up to $ 18,000 per day compared with $ 10,000 earlier. The freight charges for Panmax tankers, which carry around 65,000 tonnes of oil, has increased from $ 9,000 earlier to around $ 16,000 per day.

The US imports around 15 per cent of its oil from Venezuela but after the strike broke out in that country it had to switch to purchases from Persian Gulf countries and the west coast of Africa.

While it takes only five days for ships to traverse the distance from Venezuela to the US shores, the journey from the Gulf takes five to six weeks. This longer haulage has generated more business for shipping companies.

The Opec decision to increase oil output by 1.5 million barrels per day is expected to keep the tanker market buoyant as it falls in the long haulage category.

The shipping industry was hit by the economic slowdown and freight rates started falling since the last quarter of 2000-01 when Opec had cut production. Oil exports from Iraq under the oil-for-food programme were also stopped at the time, which led to the reduced movement of oil.

With the continuing economic slowdown, a warmer than normal winter last year and the World Trade Center attacks, the volume of international trade declined which, in turn, had hit the shipping business hard.